Perhaps you’ve had this experience: you walk into your local coffee shop and mull the options. The barista gestures to the different roasts available. Somewhere below the name of the roast are a plethora of colourful eco-labels proclaiming the coffee to be Fairtrade, USDA Organic, Rainforest Alliance, or Bird-Friendly certified. You may pause and wonder to yourself “do any of these labels really mean anything?” Does opting for one blend over another actually help to preserve the rainforest, improve worker wages, or keep toxic chemicals out of the food chain?
These decisions carry even more weight for sustainable procurement professionals. Businesses are under increasing pressure to manage environmental impacts across their supply chains. Growing public scrutiny has pushed corporate environmentalism from the margins to the mainstream of business practices in recent years. Done credibly, corporate environmentalism can help attract new customers and retain old ones. Done superficially, it can do lasting damage to a company’s brand through accusations of “greenwash.”
This was the case for SC Johnson when they put a stem and leaf logo on certain household cleaning products around 2008. The logo proclaimed “Greenlist Ingredients – Same Great Product!” Three years later, the company was forced to withdraw the label and settle two class action lawsuits for undisclosed amounts. Plaintiffs in the cases successfully argued that the Greenlist label was vague and denoted few discernible environmental benefits. While the little stem and leaf looked like a credible eco-label, as it turns out, it was concocted by SC Johnson employees for marketing purposes.
The SC Johnson example illustrates the perils of a going-it-alone approach to eco-labeling. It is for this reason that businesses are increasingly turning to independent, third party standard-setters to help them set and enforce environmental rules along their supply chains. Third party standard-setters craft rules that transcend borders and steer the behaviour of billions of producers around the world. Political scientists refer to them as a form of “transnational governance” inasmuch as they have power, authority and legitimacy that resembles that of international organizations like the United Nations. Moreover, they hold the potential to achieve results when international negotiations remain mired in gridlock. By some estimates, if just 10% of agricultural production complied with rules outlined in voluntary sustainability standards, some of the worst environmental impacts of agricultural production could be avoided.
Yet, for companies looking to bolster their environmental credentials, choosing the right eco-label is far from a straightforward task. The world of eco-labeling is a veritable Wild West where any cowboy with a graphic design program can make a label proclaiming a product to be environmentally friendly. Even some third party standard-setters have come under scrutiny in recent years for setting the bar too low or having poorly designed standard-setting and enforcement systems.
So how can consumers and sustainability professionals separate real environmental claims from fake ones? This is a question I tackle in my new book, Beyond Greenwash. The bad news is that it isn’t as simple as looking at environmental impacts. Deforestation rates may fall and biodiversity rates may rebound, but it is very difficult to isolate the impact of eco-labeling from other variables that might be driving these changes. A more productive approach is to focus on how eco-labels are designed, built, and managed. This has the added value of allowing a common basis for comparison across different types of eco-labels, sectors, and issue-areas. Generally speaking, there are a few characteristics that consumers and companies can look for when selecting a credible eco-label.
Is it independent?
Consumers and procurement professionals should be wary of any self-awarded eco-label. Look for labels that originate from a credible, third-party organization. There should also be independence between the organization that sets the standard and the organization that audits compliance against its criteria. This is important for preventing a conflict of interest. Standard-setters generally receive revenues based on how widely their eco-labels are used. An eco-labeling organization that checks compliance against its own standard has an incentive to overlook non-compliances and set a lower bar for achievement.
How inclusive is it?
The most credible eco-labels are the ones that are developed with close participation from all relevant stakeholders. If an eco-label promotes sustainable coffee production, then it should involve coffee farmers, scientists, processers, NGOs, and community members (amongst others) in standard-setting. Sometimes, stakeholders will lack the means to attend important meetings. In these cases, it is incumbent on the standard-setter to set aside funds to help marginalized stakeholders participate in a meaningful way. Bringing lots of stakeholders to the table is the best way of ensuring that an eco-label is relevant to local conditions, sets the bar appropriately high, and avoids privileging some interests over others.
How transparent is the label?
As a general rule of thumb, credible eco-labels have well-maintained websites. Any interested member of the public should be able to log on and find information about the eco-labeling standard, the process through which businesses become certified, the governance and funding of the eco-labeling organization, and the roster of firms that hold active or withdrawn certifications. Dubious eco-labels keep everything offline or hidden behind pay walls; credible eco-labels make their information freely available online.
Is the label committed to improvement?
Both consumers as well as companies shopping around for a credible eco-label should look for ones that monitor and evaluate their impacts and take steps towards continuous improvement. Often this can take the form of ‘impact reports’ that outline the progress an eco-labeling organization has made towards its sustainability objectives. Impact reporting should feed back into newer versions of eco-labeling standards so that there is a constant dialogue about what is working and what is not. Impact evaluation is a messy science, but credible eco-labels do their best to assess whether their approach is having the desired effect.
Granted, all of this may sound like a lot of work for choosing a cup of coffee. The latest market research suggests that over one fourth of global coffee production is currently certified to one of five major eco-labels. Indeed, certified production is growing across nearly all sectors. There may soon come a day when most major commodities are produced in accordance with a sustainability standard. The bad news is that not all of these eco-labels will be credible. Thus, it has never been more important to understand what’s behind the little green frogs, blue angels, and white bunnies that festoon grocery store aisles. Digging into the rules and procedures of how eco-labels are made is the key to achieving durable environmental impacts and moving Beyond Greenwash.
Eco-Labels that Follow Best Practices
Coffee/Tea/Cocoa: UTZ Certified
Paper/Forest Products: Forest Stewardship Council
Seafood: Marine Stewardship Council
Carbon Emissions: Enviro-Mark Solutions
Fruits/Vegetables: Linking Environment and Farming (LEAF)
Hamish van der Ven is an Assistant Professor in the Department of Political Science and School of Environment at McGill University and the author of Beyond Greenwash: Explaining Credibility in Transnational Eco-Labeling (Oxford University Press, 2019).